Your original video is 1920x1080 px (or any 16:9 ratio) and you are turning it into 1440x1080 (4:3 ratio), that is where the borders are added. Your resulting video also has Anamorphic pixel ratio (4:3), which makes the resulting viewing ratio back 16:9 . I
do not know, why this anamorphic pixel ratio is used (maybe because the original has this - at least Windows Media Encoder tries to preserve it). You should try with other HD output definitions or you can create your own (you might need Windows Media Encoder
package for that) with pixel ratio set to 1:1 (default). The "stock" output format definitions that come with Movie Maker have given me strange outputs as well.